scrap local scrap copper price increease scrap copper china price forecast

SCRAP COPPER PRICE SURGE

Scrap copper prices are at an all-time high following demand from imported scrap.

Here we breakdown key factors that have influenced rising prices, whether scrap copper prices will continue to increase, and if the recent trend in rising scrap copper prices is soon to end.

Value of Copper To Increase

copper price chart

Demand for copper has increased over the past year. Rates are at an all-time high as demand for EV production, infrastructure, and other technological industries increases.

With many countries now focusing on reducing crude scrap copper production following environmental concerns, the demand for scrap metal and scrap copper in particular is expected to stay strong. However, this could change as many recover post-pandemic! 

China Floods To Affect Scrap Copper Prices

file photo: aerial view shows rescue workers evacuating residents on a flooded road following heavy rainfall in zhengzhou

Floods in China have led to supply concerns and demand for damaged infrastructure. 

It is estimated that the flooding in China has led to costs of over 10 billion.

With market pricing being affected by the recent floods, disruption to output in the Henan province and transport city of Zhengzhou shows strong demand for materials.

With a reduction in crude copper production, the use of scrap copper is predicted to support demand in East Asia as part of a long-term Covid recovery stimulus plan. 

We’re going to see prices probably continue to remain high and move higher likely over the next couple of years

Jason Schenker, President of Prestige Economics & Chairman of The Futurist Institute

UK Scrap Use To Increase

metal throw 2 24 1

The UK’s scrap use is also set to increase following a scrap ban lifted from China. There’s been a push to use scrap material rather than raw, crude production methods. 

UK scrap metal imports have increased massively since June last year.

Although the UK is the largest exporter of scrap (mainly steel) across 28 countries that make-up the European Union, overall scrap use has dropped by 14% since 2019. 

Despite this, imports from the UK have continued to grow since the first arrival in May. Imports grew seven-fold to 1,700 in June following an end to the scrap ban by China in January.

With a push on using more scrap metal as opposed to the normal damage of mining raw materials, scrap metal and scrap copper use is expected to increase following supply and demand post-pandemic. 

Mining Production Down
peru gives southern coppers 1 4bn tia maria copper mine final approval

Raw production of copper went down massively during the pandemic as rising infection rates and staff shortages led to reduced mining output.

Peru, a leading copper producer, saw its production of copper go down by 12.5% to 2.15 tonnes in 2020 as coronavirus restrictions reduced output. This was concerning for major economies like China. As the world’s largest importer of red metal China relies heavily on metal for infrastructure and industry use. 

Following reductions in output, China’s part in their metal stimulus plan has reportedly stockpiled on raw material, which will increase the price of copper, whilst putting reliance on domestic scrap as regulations have been relaxed. 

Copper Price Advance
Снимок экрана 2020 10 28 в 10.09.46 ПП

Recently, copper prices have been increasing as China has been releasing fewer metal reserves than predicted.

China is looking to sell another 30,000 tonnes of copper, 90,000 tonnes of aluminium, and 50,000 tonnes of zinc at auction from its state reserves on July 29.

This follows the Chinese government’s second sale after commodities have sky-rocketed. 

Maybe we haven’t been able to jump back in with both feet, but it feels like most of us who trade in copper have at least one foot back in the Chinese swimming pool

Daniel Fischer, Vice President of Kataman Metals
Copper Prices In The Future

As China is massively reliant on imported copper as well as refined copper to meet demand from infrastructure and manufacturing sectors such as consumer electronics and electric vehicles, China will continue to hold influence as the world’s largest copper importer.

Factors that will influence copper prices and scrap copper in the future include manufacturing activities post-pandemic, reductions in Chinese scrap collection and processing, and relaxed regulations on scrap imports as certain metal grades such as copper scrap are given set standards to follow.  

China arguably has had the best economic recovery following Covid-19 as the demand for copper is remains high. Reducing future disruptions to the supply chain has led to the government strategically stockpiling copper. This strategic stockpiling will likely increase as supply & demand for major metals such as Copper, Iron & Steel will inflate future metal prices. 

Scrap copper prices are high at the moment as supply and demand for infrastructure and certain industries such as electronics & electric vehicles impact the global copper market.

A major economy such as China has much influence over the global copper market, as does Peru with them being the second-largest producer of copper.

As many countries recover post-pandemic, copper prices are expected to remain high in 2021. This will provide a steady rise in scrap copper prices as less reliance is being made on mining raw materials, whilst certain countries in the EU such as the UK have had their scrap ban lifted from China.

Find The Latest Scrap Metal Prices Here!

China has affected the price of scrap copper as they look to project their metal stimulus plan under their Covid recovery scheme.

Due to the recent floods which have affected key provinces in China, reliance on red metal has never been more essential. 

Their reliance on copper for infrastructure and other industries will ensure that prices continue to stay high.

The price of scrap copper and scrap metal in the UK changes with supply as demand, although as highlighted prices stand pretty firm at the moment and are expected to hold over the coming months.

View the latest scrap copper prices here.

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